In the first two installments of this series we discussed the pros and cons of filing your intellectual property action in the United States district courts and at the United States International Trade Commission (ITC). Here we discuss inter partes reviews (IPRs), an option that is rapidly gaining popularity due to its speed and reduced costs.
An IPR offers parties who have been sued for patent infringement or fear imminent suit several distinct advantages: 1) speed; 2) relatively low cost; 3) knowledgeable judges; 4) legal standards making it easier to prove invalidity; and 5) the ability to stay the district court litigation until the review is completed.
To date this procedure has been mostly used by those in the electrical, computer, or mechanical fields. According to the USPTO only about 6 percent of petitions have involved pharmaceuticals, and what many are saying is the first inter partes review of pharmaceutical related patents occurred this June.
Because there is relatively limited discovery in an IPR, the costs of the proceeding are substantially less than litigation. Knowledgeable judges are guaranteed, because the proceeding is before the PTO itself. In addition, once an IPR has been instituted, a petitioner can move to stay co-pending district court litigations, and if the motion is granted the petitioner can pursue their invalidity claim without litigation expenses mounting.
Though an IPR will not stay an ITC case, if an IPR is filed at roughly the same time as an ITC investigation begins, the initial decision in the IPR is likely to issue before the Commission makes its final decision. Even though the decision is not binding, it will be influential.
However, filing an IPR has some risks—the patentee has the ability to revise the claims during reexamination, and the defendant may then be faced with patent claims that are stronger than they were previously. The issue that will affect more losing petitioners is estoppel—under the rules, the accused infringer essentially has “one bite” to argue invalidity based on patents and written documents.
However, IPRs are not a cure-all for all accused infringers. IPRs only offer relief to those accused of patent infringement—those accused of violating trademarks, trade secrets, copyright, or other causes of actions cannot utilize this procedure. In addition, for parties lacking defenses other invalidity based on patents and publications, the risks of estoppel can be significant.
Though an inter partes review is generally not useful to those trying to protect their intellectual property, or those accused of violating intellectual property rights other than patents, it offers those accused of infringing patents an opportunity for relatively speedy, inexpensive resolution of patent disputes, with knowledgeable judges and legal standards that are more favorable to invalidating patents than those in other forums.